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"HELP STOP THE HST' NOVEMBER 24,2009 ( see how you can help now below )

Subject: Stop the HST – Cost of buying, owning and selling a home to go up by 8%

Last week, the Government of Ontario formally launched its latest assault on homeowners, purchasers and sellers with the introduction of legislation to harmonize the provincial sales tax and goods and services tax.

Homebuyers and sellers will pay 8 per cent more on legal fees, appraisals, real estate commissions, home inspection fees, and moving costs, adding about $1,500 in new taxes to the average residential real estate transaction in Ontario.

For homeowners the HST will also add hundreds of dollars in additional tax on utility bills (gas, electricity and home heating fuel), on home renovation labour, the cost of lawn upkeep or landscaping and the cost of snow removal.

Please help Ontario REALTORS® fight this tax wihich will effects all of us in this hurting province already. In less than 30 seconds you can send an email to your MPP asking them to vote against sales tax harmonization legislation, by clicking here: http://bit.ly/stopthehst

Thank you in advance,

Lakeview Realty Inc.

Michael J Preston

Broker of Record

Housing Equity is Substantial in Canada

Some very interesting estimates from Scotiabank’s Economics Department (see Figure 2) show that Canadians have retained strong equity positions in their homes. Scotiabank estimates that in Canada, home equity is equal to almost 70% of the values of residential property – in other words, total mortgage debt is only about 30% of the total value of Canadian homes, and the equity position today (almost 70%) is stronger than it was a decade ago (about 66%). In the US, on the other hand, there has been sharp erosion of home equity, which began during 2001/02. By 2004 – well before the onset of the current US troubles - the equity position had already seriously eroded.

Low Debt Service Ratios in Canada

Scotiabank has estimated that consumers’ total debt service burden in Canada (as a percentage ofafter-tax income) has not worsened during the past decade, with the burden staying close to 8%. In the US, by contrast, the debt service burden is almost twice as high (about 14%) and the burden has increased significantly, from about 12% a decade ago.

Very Few Canadians are in Arrears

The most recent data from the Canadian Bankers Association – which covers 7 major banks – shows that just 0.27% of residential mortgages were in arrears (three months or more, as of June 2008). This amounts to about 10,300 out of 3.85 million mortgages. This data from the Canadian Bankers Association covers about 85% of all residential mortgages in Canada - it is possible that there is a different rate of arrears in mortgages from other lenders. The Bank of Canada estimates that about 2% of sub-prime mortgages in Canada may be in arrears or foreclosure. In total, 20,000 to 25,000 Canadian home owners might be in arrears, a very small fraction of the 8.05 million home owners in Canada.

Interest Rates Contribute to Sustained Affordability

One of the major risks faced by mortgage borrowers – a factor that has clearly contributed to the US crisis - is that their monthly mortgage payment might increase when their mortgage comes up for renewal. Interest rates for 5-year fixed rate mortgages (after lender discounts) are currently 5.25% to 5.5%, almost identical to the average for the past five years (5.2%). For variable rate mortgages, typical discounted rates are now 4.25% to 4.5%, similar to the average of the past 5 years (4.3%). For most Canadian home owners, future renewals will not result in increased mortgage payments. What’s more, most Canadian households have experienced income growth since they took out their mortgages, with the consequence that over time their ability to cover their mortgage payments has improved. In many respects the Canadian and US housing markets have followed similar paths during the past decade – until late 2006 (see Figure 3). In both countries strong demand resulted in rapid growth in property values. In the US, however, a strong growth cycle turned into a bubble, and like all bubbles, it eventually burst.

RBC survey finds home buying intentions hold steadyTORONTO, Oct. 29 /CNW/ - A new RBC study conducted during the marketturmoil in October finds overall intentions to purchase a home in the next twoyears remain steady at 22 per cent and have not changed since January 2008. Aswell, renovation intentions are slightly higher than last year - up fourpercentage points as 70 per cent of respondents are planning to renovate ormake home improvements in the next two years.

"Despite recent economic events, we've noted that Canadians still believe
a home is a good investment and many are continuing with their home
improvement plans," remarked Catherine Adams, RBC Royal Bank's vice-president,

Home Equity Financing.

INVESTORS by Michael Preston

When is a good time to buy multi-unit residential properties? Anytime the fundamentals are good. Several factors must be considered . A carefully completed due diligence check list is must before proceeding. Firstly a growing city location will be ideal for possible future capital gains and income growth potential. The city or town you choose to invest in should have overwhelming evidence of growth and overall low vacancy rates. ( See CMHC free rental survey reports online) In a perfect world you will discover the location before competition drives prices up. Secondly a structurally sound building in good repair will provide a dependable cash flow and a growing positive return. Thirdly your financing can make it all happen or not. Vendor take backs are not uncommon and can be a great way to make a purchase for those entering this investment arena Now manage diligently! If you would rather not manage your self , look for buildings 10 units and up and you will be able to afford to hire a professional management team.. What cities or towns may be worth a closer look? If you move early you can grow and prosper as the communities plans become a reality . You could be in place as prices begin to rapidly rise and the general investment public begins to react to the strong fundamentals and low prices compared to the cities already on the radar screen. What cites would you choose ? What about St John New Brunswick,( oil refinery, tidal power), Sudbury Ontario,(mining , huge reinvestment in the older mining properties and infrastructure) Hamilton Ontario ( dynamic city redefining it self with investment in the water front) and questionably Windsor Ontario,( a city that is also seeing the importance of diversity and is working hard to invest in its future ,residential vacancy rates are low , many good properties to choose from at excellent prices, you can grow here) Lastly you may find the best properties possibly diamonds in the rough in your own neighbour hood town or city. In our area Orillia, Ontario has been chosen (by Real Estate Investment Newwork out of Calgary Alberta)along with Barrie for three years running as the best place to invest for potential capital gains growth. So keep your eyes open and your house in order so your able to move on the deal when it presents it self , any town and city can have them especially during these more turbulent times. Updated October 27/2008

Michael Preston, please send me questions or your comments mjpreston@lakeviewrealty.ca

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Bank of Canada releases Monetary Policy Report
The Bank of Canada released its October Monetary Policy Report, which discusses current economic and financial trends in the context of Canada's inflation-control strategy.

In the Report, the Bank noted that three major interrelated global developments are having a profound impact on the Canadian economy and making the outlook for growth and inflation more uncertain than it was at the time of the July Monetary Policy Report Update. First, the intensification of the global financial crisis has led to severe strains in financial markets. The associated need for the global banking sector to continue to reduce leverage will restrain growth for some time. Second, the global economy appears to be heading into a mild recession, led by a U.S. economy that is already in recession. Third, there have been sharp declines in many commodity prices.

Consistent with the G7 Plan of Action, major economies have announced extraordinary measures to stabilize their financial systems. These initiatives will be pivotal to the resumption of the flow of credit to support global economic growth. Canada's economy and strong financial system will benefit directly from these actions.

The weaker outlook for global demand will increase the drag on the Canadian economy coming from exports. Lower commodity prices will also dampen the outlook, working through a deterioration in Canada's terms of trade to moderate domestic demand growth. The marked tightening in Canadian credit conditions in recent weeks will restrain business and housing investment.

The Bank expects growth to be sluggish through the first quarter of next year, then to pick up over the rest of 2009 and to accelerate to above-potential growth in 2010 supported by improving credit conditions, the lagged effects of monetary policy actions, and stronger global growth. The recent sizable depreciation of the Canadian dollar will also provide an important offset to the effects of weaker global demand and lower commodity prices. Overall, the Bank projects average annual growth in real GDP of 0.6 per cent in both 2008 and 2009, and 3.4 per cent in 2010.

With excess supply projected to build throughout 2009, and with lower assumed energy prices, inflationary pressures will ease significantly relative to the projection in the July Monetary Policy Report Update. Core inflation is now projected to remain below 2 per cent until the end of 2010. Total CPI inflation should peak during the third quarter of 2008, fall below 1 per cent in mid-2009, and then return to the 2 per cent target by the end of 2010.

On 21 October, the Bank of Canada lowered its policy interest rate by 25 basis points. That decision followed a 50 basis point cut on 8 October taken in concert with other major central banks. Together, these moves bring the cumulative reduction in the Bank's target for the overnight rate to 75 basis points since the Bank's previous fixed announcement date on 3 September.

These actions provide timely and significant support to the Canadian economy. The cumulative reduction in the Bank's policy rate since the beginning of December 2007 is now 225 basis points.

In line with the new outlook, some further monetary stimulus will likely be required to achieve the 2 per cent inflation target over the medium term. The evolution of the financial crisis, its impact on the global economy, and the timing of the effects of the various extraordinary measures being taken to address it pose significant risks to the inflation projection on both the upside and the downside

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